Tuesday, May 20, 2014

'Fit' is a crucial component to understanding human behavior because the connection people have to a purpose or mission is the primary motivator for why people do the things that they do. Because people constantly influence one another in how they
think and act, understanding how individuals ‘fit’ within the context of a
team, organization, or culture is key to understanding and predicting how those
individuals will behave. In the following blog, David Sorin discusses various relationships in the business world, and
why ‘fit’ is essential to achieving and maintaining the benefits of those relationships.

When we think about the word “fit” with regard to
business, it could be used in several ways. The simplest could refer to actual
dimension – fitting physical resources into a given space. The more complex
definitions address whether a given business fits into its marketing or brand
niche or even in the community in which it resides. These and other
measures in between are all important ways “fit” is critical in the business. A
previous blog post discussed the need for employees to fit in their roles within
a company. This is crucial to productivity and team effectiveness. And
employees must align with the company as a whole on vision, values, behaviors,
attitude and ethics for the relationship to work.

CUSTOMERS

Typical entrepreneurs starting a business and then gaining
traction are not overly concerned with whether each customer or client they are
working hard to acquire actually fits the narrow profile of “ideal customer.”
The idea is to grab customers whenever and however possible and not look too
closely at each one at the time. Twenty first century companies are capturing
as much data as they can about each customer, which they will, at some point,
examine to discover macro-trends. They may use that data over time to hone
their marketing pitches but they are not normally using it to decide whether
they should or should not do business with a given customer.

Let’s face it. Not all customers fit. How come? What makes
them not fit? They may have:

different priorities

different ideas when it comes to the relative value of the
quality, service or price the company offers

different expectations

different views of what a successful engagement between them
and the company looks like.

An online retailer may not have any way of knowing if a
first time shopper is a good fit. But what about the return shopper who
has a track record of buying and returning multiple items and never keeping
anything? Or the one who returns items after wearing them saying they don’t fit
or are poor quality? Or the one that always takes advantage of the lifetime
guarantee?

A service business should know after a single engagement
whether a client is one they want to do business with again. A client changing
his mind all of the time, or asking for “do overs” can be costly and
frustrating.

An established business may choose to jettison clients that
don’t fit because they recognize that they are literally not worth their time.
Younger, hungry businesses may not be able to look through that lens. Their
definition of “fit” may need to mature based on experience.

VENDORS

What about vendors? Does a business need to find a fit with
its vendors? To answer that, one has to consider what “fit” looks like. The
best vendors meet the company’s needs – timely delivery of goods and services,
good quality work, fair payment terms, flexibility when needed. Some even find
ways to partner with their customers in win-win programs, some may finance
inventory during holiday or other seasons and some may offer support via sales
and marketing dollars or resources.

In a start-up or early business stage, a business owner may
be willing to use any vendor that provides credit or decent payment terms. This
may not be enough to sustain a relationship as a business becomes more
successful. If a vendor, even a valued one, is discovered to have very
different values or ethics it can cause a problem. Having biased views or
treating employees poorly can be another reason to end a relationship. If there
is not a values fit, there is at the very least dissonance in the
relationship. Business practices, even legitimate ones, can sometimes be
difficult to accept. Sudden changes in payment terms or delivery times or
supply chain logistics can turn a vendor relationship sour. A business
owner needs to define what a good vendor is and then be willing to eliminate
those that do not fit the definition.

COMMUNITY

A company needs to fit into its community. A strip club in a
residential neighborhood will not cut it. Nor will a junkyard in the wrong
location. Business owners need to be aware of where they can fit in as
good corporate citizens and fill a positive role in the community. Fit in this
arena is usually based on the use of the property, the community’s regard for
the activities of the business and how noticeable those activities are, the
amount of tax revenue a business may bring to the locality, the number of jobs
the business provides and perhaps most importantly, the image of the business
and how that impacts the adjoining residents and businesses. If the activities
of a business bring down the value of surrounding real estate, there is not a
fit. If the activities of a business subject nearby residents to any safety or
health concerns, there is not a fit.

If the community grows up around a business and its
composition changes, a given business may no longer fit. The leaders have to
recognize that and consider the newer needs of that community.

So, in answer to the question asked in the title of this
post, “fit” can be relative. A business may find a fit when common sense is
buried or desperation is close to the surface. Humans can convince themselves
of anything. Look at the number of football teams that will take a chance
on a player that blew up his two previous teams. Somehow, they believe they can
make him fit in with them. If owners pause long enough to catalogue what
is important to them in their relationships and then weigh every candidate
against that list, they can have a relatively clear picture of whether the
relationship will work. If they choose to ignore the list for other reasons, it
may work for a while, but not long-term.

Fit is important. Ignore it at your risk. If you stretch
your values and beliefs to create a fit, it will often come back to bite you.
If a business owner is in a mindset of abundance rather than one of scarcity,
there will always be more customers, vendors, potential employees and even
places to house the business. Find a fit.

David Sorin is an attorney of 38 years and the entrepreneur
behind seven startups. He is also the co-founder of the Management
Partner Development Institute, an organization aimed at educating law firms,
and the co-creator of 720thinking, an organization that uses a holistic model
supportive of individuals and organizations. David has been a speaker at a
variety of national conferences and conventions over the last fifteen years and
has been a guest lecturer at several colleges and universities, including the
Wharton School at the University of Pennsylvania. David is deeply involved in the entrepreneurial community in the Philadelphia region, and his strengths and expertise include strategic planning, innovation, conflict resolution, leadership development, decision making, ethics and culture, and executive coaching.